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Faster & faster! The US now has 82.4 million broadband connections

Om Malik — Wed, 22 May 2013 00:18:32 +0000

Americans continue to spend big on their internet needs, and that is reflected in the robust demand for broadband during the first three months of 2013. Data collected by Leichtman Research Group, a Durham, NH-based market research company, shows that the top broadband providers in the U.S. added 1.1 million (net) new connections over that period, bringing the total number of broadband subscribers to about 82.4 million.

According to their research, cable companies have about 47.5 million broadband subscribers, while the remainder are with the phone companies. Cable companies added about 800,000 new subscribers, about 72 percent of the total for the month. The top two phone companies — AT&T and Verizon — saw a decline of 696,000 DSL accounts but added a total of 919,000 fiber subscribers. FIber-based broadband now accounts for about 40 percent of AT&T and Verizon’s total broadband customer base.

Bruce Leichtman, president and principal analyst for Leichtman Research Group, pointed out that typically the first quarter is better than the second and third quarters of the year, and “2013 began with another strong first quarter.” Net broadband additions in Q1 2013 were about 500,000 more than in Q4 2012, and that bodes well for rest of the year.

A resurgent housing market and stronger economy along with our growing need for speed and connectivity are the reasons why demand for U.S. broadband is booming. Here are some numbers to give you an idea as to who is winning and who is losing.

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VMware takes on the BYOD problem with — you guessed it — virtualization

Barb Darrow — Wed, 15 May 2013 18:05:04 +0000

If you’ve talked to a CIO lately, you’ve likely got an earful about having to support employee smartphones and the problems they bring — users sending off company files to Dropbox or their personal Gmail account or God knows where else. They loathe the idea that a user may be running Twitter or Scrabble on what they view as a piece of business equipment. If only there were a way to cordon off the personal from the professional …

Now, VMware and Verizon Enterprise Solutions say their newly released VMware Horizon Mobile service eases that angst. The news comes two years after the effort, called Project Horizon, was first announced. Two new VMware-ready phones — the Motorola Razr and LG Intuition — will run the new service with additional “VMware Horizon”-ready devices to come. And these devices running this service will bring fulfill “dual persona” promisew which segregates work email and access to applications from Twitter and Facebook.

According to the press release, those devices running in VMware Horizon Mobile environments provide:

” … a corporate workspace that is controlled and managed by IT, and is completely separate from the employee’s personal information, applications and data on the device. The workspace contains its own operating system, applications and policies, enabling IT to remotely manage the entire lifecycle of the workspace. IT is able to provision the workspace, deploy applications and monitor the flow of information to and from the workspace for security.”

According to a blog post VMware’s Srinivas Krishnamurti:

“Irrespective of who actually buys or owns the device, the corporation or the user, most employees tend to download personal apps onto these devices – Facebook, Angry Birds, Temple Run, etc. coexist with work email/PIM. It is fair to assume then that most devices will have both personal and corporate content (apps, data and services).”

A perpetual license for the service costs $125 per user.

Ah, Angry Birds and truly secure corporate email in one small package. If these devices deliver as promised, that is the best of both worlds — although one might quibble at the lack of immediate support for iPhones or Samsung Galaxies –both hugely popular among business users.

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Verizon’s Nokia Lumia 928 launches May 16, $99 after rebate

Kevin C. Tofel — Fri, 10 May 2013 14:19:50 +0000

Verizon and Nokia jointly announced on Friday the availability for Nokia’s Lumia 928, a Windows Phone 8 handset with LTE support. Customers can purchase the smartphone online or in Verizon stores for $99.99 with a two-year contract and after a mail-in rebate. For a limited time, buyers will also receive a $25 credit for Windows Phone applications.

Although neither company released many specification details of phone, the Lumia 928 is very likely an improved Lumia 920. That phone launched last year as an AT&T exclusive and is considered to be a flagship, high-end model. Here’s a first look at the new Lumia:

Like that phone, the Lumia 928 offers a 4.5-inch OLED screen with Gorilla Glass for protection. It also features an 8.7 megapixel PureView camera with Carl Zeiss optics, Xenon flash and optical image stabilization; something Nokia showed off earlier this week on video. The new Lumia also supports wireless charging.

I think the pricing on this device is quite aggressive when compared to flagship phones running on other platforms. Then again, it probably needs to be. While having a high-end Lumia on one of the largest U.S. carriers can only help Nokia — and Windows Phone 8 sales, for that matter — the price point can help the Lumia 928 stand out from the flagship crowd.

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Guess who went public? T-Mobile completes MetroPCS deal

Stacey Higginbotham — Wed, 01 May 2013 15:05:14 +0000

T-Mobile USA began trading on the New York Stock Exchange Wednesday under the ticker TMUS, as its deal of more than $1.5 billion to combine with MetroPCS has closed. The newly combined company opened at $16.25.

Based on 2012 results, the combined company would have $24.8 billion of revenue and $2.7 billion of free cash flow. As of March of this year it has approximately 43 million subscribers. The deal terms were complicated including a 1 for 2 reverse stock split by MetroPCS, a cash payment of $1.5 billion to its MetroPCS stockholders and the proposed NewCo made up of T-Mo and MetroPCS acquiring all of T-Mobile’s capital stock from Deutsche Telekom in exchange for approximately 74 percent of MetroPCS’ common stock.

While the deal was approved by shareholders and regulators, the combined company still is trying to fight it out in a highly competitive and saturated mobile market. As my colleague Kevin Fitchard wrote when the deal was announced, this is a deal about beefing up T-Mobile’s spectrum so it can keep fighting Verizon and AT&T. Meanwhile Sprint, the nation’s third-largest carrier is in a deal of its own trying to buy Clearwire with cash provided by new partial owner Softbank.

It’s like a soap opera where everyone’s fighting for the airwaves. However, those fights are in the future, and today we just have to watch the stock and ponder what this means for the customer. Luckily, Fitchard already explained how this deal affects customers, so read that while you watch the stock.

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Verizon to spend $100M on solar panels, fuel cells for facilities

Katie Fehrenbacher — Tue, 30 Apr 2013 12:00:38 +0000

Telecom giant Verizon is expected to announce on Tuesday that it plans to spend $100 million on clean power projects, including installing solar panels and fuel cells at 19 locations to help power its buildings and network infrastructure. Verizon’s Chief Sustainability Officer James Gowen plans to make the announcement at Fortune’s Brainstorm Green conference on Tuesday.

Verizon plans to buy fuel cells from ClearEdge Power and solar panels from SunPower. The amount of power from the solar panels and fuel cells, which will be installed across seven states, will be 70 million kilowatt hours of electricity. That’s enough to power 6,000 homes per year.

Fuel cells look like industrial refrigerators, and they use a chemical reaction to produce electricity and heat. They are filled with large stacks that are lined with catalysts (a metal, sometimes platinum), and a fuel (commonly natural gas) is inserted in one side and runs over the stack. Electricity and heat flow out the other side. The benefits of fuel cells are that the electricity can be created on site where it is used, and if the fuel used is biogas, then the electricity is also free of carbon emissions.

Verizon has been using a small amount of solar and fuel cell technology for awhile, but this move represents the company’s largest commitment to clean power projects to date. Verizon is looking to cut its carbon emissions footprint substantially by 2020.

Gowen told me in an interview that this initiative is being driven both by the desire to add energy resiliency to Verizon’s facilities as well as the company’s sustainability goals. During superstorm Sandy, a fuel cell installation that Verizon had in Long Island that powered a switching station (using fuel cells from UTC Power, which was acquired by ClearEdge Power) never went down. Gowen said he wanted that type of off-grid resiliency through out Verizon’s facilities.

All of the solar panel installations in 2013 will be pretty large ones. For example, Verizon is putting solar panels on the roof of a data center in New Jersey, as well as on the ground next to the data center. The return on investment for the combined clean power projects is supposed to be around ten years, said Gowen.

Deploying clean power technologies — both solar panels and fuel cells — at data centers is a growing trend for internet and telecom companies in the U.S. Apple (a AAPL), Google, eBay, and Microsoft are all deploying clean power at data centers to help add off grid resiliency, as well as lower carbon emissions.

Apple is building its own solar panel farms and fuel cell farms at its data center in Maiden, North Carolina. Google has spent over a $1 billion investing in clean power projects and recently started working with Duke Energy on a clean power initiative in North Carolina. AT&T has large fuel cell farms powering its operations in California and Connecticut, using technology from Bloom Energy.

In a call last week, ClearEdge Power’s CEO David Wright called Verizon’s commitment to clean power technology “a stake in the ground for other technology companies.”

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Vodafone investors want more money in still-speculative Verizon takeover deal

Stacey Higginbotham — Mon, 29 Apr 2013 14:09:01 +0000

Verizon hasn’t put an offer on the table, but that hasn’t stopped some of Vodafone’s biggest investors from saying a $100 billion takeover price is too small. They want $120 billion, gosh darn it!

According to a Reuters story this weekend, six institutional investors have protested the $100 billion price tag that Reuters floated last Wednesday. Both of these numbers followed a wack-a-doo rumor from early April that AT&T and Verizon would jointly team up to buy out Vodafone’s 45 percent stake in Verzion in a deal valued at $245 billion. That rumor was reported by the Financial Times’ Alphaville blog. And Verizon denied it.

For those watching at home, it’s possible that you think the media has lost its ever-loving mind, or that somewhere a bored investment banker is sitting back in his ergonomic chair, fingering his Ferragamo tie and cackling with glee. But in general, when these sorts of rumors start hitting the press, it’s part of an aggressive campaign of leaks, where a company (or bank) can float some rumors in hopes of sparking a deal.

Reuters reporters aren’t getting phone calls from Verizon’s board members (although it has happened!); I think they are getting calls from bankers who want to make a deal happen. And it’s a crazy deal with crazy regulatory and possibly tax burdens, but it’s also the right sort of crazy. Verizon and Vodafone’s shared stake in Verizon Wireless has irked both companies for years.

Vodafone needs cash for investments in growing markets and Verizon has been stingy with its dividends. But, as the latest Verizon dividend payment shows, if investors can get Verizon to part with the dollars, Vodafone rewards its shareholders with cash. Meanwhile, Verizon would love to own its network outright if Vodafone would just sell back that stake. But so far Vodafone won’t. Thus, the leaks.

Of course, the two companies have broached the subject of a merger, much like unhappy spouses broach the topic of divorce. But the logistics of the deal — Verizon probably doesn’t want to pay what Vodafone thinks the stake is worth, and each side has shareholders who are, like children, unhappy with a split — have made it too much to think about.

Hence the posturing via blogs and wire services. This is a way of testing the shareholders and perhaps regulators to get a feel for what the deal might entail. This may not come from the companies as a serious play, but rather from bankers who see the fees associated with the deal and understand the lay of the land at both companies. If they can warm up the companies via the media, then they might get a chance at a pretty lucrative deal. That is what bankers get paid to do.

So grab your popcorn, and sit back to enjoy the negotiations between Verizon, Vodafone and whatever financial institution or institutions are selling this sideshow. I suppose it beats wondering how carriers will compensate for the lost of messaging revenue.

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Yes, it’s another Verizon-Vodafone rumor, this time of a $100B buyout

David Meyer — Thu, 25 Apr 2013 07:51:10 +0000

And lo, the Verizon-Vodafone rumor mill rumbles on. Just weeks after Verizon scotched rumors that it was planning a $245 billion takeover of its British counterpart, we have a new report, coming out of Reuters, that suggests Verizon is now preparing to buy out Voda’s share in their joint venture, Verizon Wireless.

Verizon owns 55 percent of the cellular enterprise, and – according to Reuters’s unnamed sources – it now thinks it can pick up the rest for $100 billion, half of which would come from bank financing and half of which would take the form of Verizon’s own shares. The U.S. firm apparently wants amicable discussions with Vodafone over this, but is willing to “take a bid public” if Voda doesn’t play ball.

I’ve asked Voda for comment on this latest notion, and am interested to see how any potential acceptance of the potential offer would overcome the hurdles faced in the past. The problem there, as another unnamed Vodafone investor previously explained, is that a sale of its share would hit Voda with an enormous capital gains tax bill – which is why a merger seemed more attractive.

As those in the U.K. know all too well, Vodafone is allergic to big tax bills, so let’s see how this latest outbreak of whispering pans out in reality.

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Nokia’s next “hero move”: Launch a flagship Lumia 928 on Verizon in May

Kevin C. Tofel — Tue, 23 Apr 2013 15:51:01 +0000

Verizon is set to offer a flagship Windows Phone 8 handset as early as next month, according to Bloomberg’s sources. On Tuesday, it cited two people familiar with the plan saying the Nokia Lumia 928 will launch on Verizon’s LTE network in May, although the largest U.S. carrier has declined comment. The report lines up with rumors over the past few months and could be what Nokia CEO Stephen Elop meant while speaking to investors last week when he said “another hero move” was in the works for the current quarter.

If the reports are true, adding a new Lumia flagship to Verizon’s lineup could offer a bump for both Windows Phone 8 and Lumia sales. Currently, Verizon offers just a single Lumia model: the Lumia 822, which is essentially last year’s hardware with updated Microsoft software. The Windows Phone 8 handset is free with contract and uses a relatively low-resolution 800 x 480 touchscreen, for example.

The Lumia 928, however, is expected to be an improved version of the Lumia 920, which debuted as an AT&T exclusive in November. Exclusive phone deals can vary, but many have six-month time frames; this adds more credence to a similar-looking Lumia flagship arriving in May. I’d expect Verizon’s Lumia 928 to have at least a 1280 x 768 display as that’s what the Lumia 920 offers. A newer dual-core Qualcomm Snapdragon chip would likely power such a phone and Nokia is sure to use camera technology that touts exceptional pictures as well.

Even as a new flagship model phone, I’d be surprised if it costs more than $149 on contract with Verizon. The Lumia 920 debuted on AT&T for $99 as Nokia made a big push in the U.S. market. The company has improved its sales and average handset selling price, but to push out a Lumia 928 for $199 or more — unless there’s some radical new features or functions — doesn’t make sense to me; consumers could all too easily opt for an iPhone, HTC One or Samsung Galaxy S 4 at that price.

Right now, Nokia — and Microsoft, for that matter — are trying to build up not just Windows Phone sales. They’re also trying to broaden consumer sentiment and brand awareness in a country where 90 percent of smartphones are from the two A’s: Apple and Android.

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When it comes to networking, time — and a billion dollars — changes everything

Stacey Higginbotham — Tue, 16 Apr 2013 16:19:25 +0000

Eighteen months ago I attended the first Open Networking Summit at Stanford’s campus. The event was billed as a place to learn what people were doing with the OpenFlow protocol as well as a primer on software defined networking. The event aimed to attract about 200 people, but around 600 signed up (half of those were shunted to the wait list).

Last night I attended the opening cocktail reception for a radically different ONS and had the chance to reflect on how rapidly the once-staid field of networking is changing. There were about 1,500 people registered, which was the limit of the venue. The event had grown to the Santa Clara Convention Center and attendees were a fairly even mix of suits and engineers.

The biggest change was the exhibitor section. Where in 2011 the exhibitor hall was a narrow corridor at the Stanford conference center where a little more than a dozen students, companies and non profits had set up “booths” to showcase their ideas for Open Flow, there was now a few rows of booths — most of which were quite professional.

In October 2011, I attended the show for one day and moderated a panel where I recall asking Dave Ward, who was then CTO and Chief Architect of the Platform Systems Division at Juniper, what he would do if Stuart Elby, the VP of digital architecture at Verizon, a Juniper customer, got so excited about the promise of OpenFlow and SDN that it stopped buying expensive Juniper gear.

Ward danced a bit but essentially said that Juniper had the features and expertise to pull networking gear together that Verizon would pay for. The subtext (and knowing Ward, it may have been directly stated) was that he wasn’t an idiot and he was well aware that the networking industry was shifting. But his company would figure it out.

Six months later, the same conference had grown to 700 people and had Google showing off its own networking coup — it had built a software defined network using OpenFlow that connected its data centers. And Ward was still on a panel I moderated, only now he was at Cisco: preaching the same ideas but now at a company with the resources to carry it through.

Fast forward to the opening of the summit this year on Tuesday, and I’m eager to see what awaits. All I can tell is that so far the industry has moved from the excitement of translating a new technology into a commercial endeavor — one that scored a $1.26 billion transaction when VMware purchased Nicira — to one where use cases are more common and vendor fighting has started capturing a bit of the event conversation.

Indeed, mixed among the many case studies I’ve heard so far is speculation about the vendor-led Open Daylight Foundation that includes IBM, Cisco and VMware as strange bedfellows trying to build an open source controller for the software defined data center.

Just eighteen months removed from its inaugural event, software-defined networking has clearly learned to walk — if not run.

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Vodafone shares dip as Verizon denies $245 billion takeover rumors

David Meyer — Wed, 03 Apr 2013 09:45:16 +0000

Well, that was quick. On Tuesday, the buzz was that Verizon and AT&T were thinking of bidding an eye-watering $245 billion for the UK-based carrier Vodafone. If true, this would have represented the biggest M&A transaction ever.

However, late on Tuesday evening Verizon issued the following statement, which keeps alive the perennial possibility of Verizon buying out Voda’s stake in their joint venture, Verizon Wireless, but which is also pretty categorical on the latest rumor:

“As Verizon has said many times, it would be a willing purchaser of the 45 percent stake that Vodafone holds in Verizon Wireless. It does not, however, currently have any intention to merge with or make an offer for Vodafone, whether alone or in conjunction with others.”

The denial knocked down Voda’s share price by – at the time of writing – 2.2 percent on intra-day trading. That said, according to Bloomberg, the rumor brought a 6.1 percent bump on Tuesday, so for now it did more good (for Voda’s investors) than harm.

According to Reuters, the problem with the Verizon-buying-out-Vodafone’s-stake scenario is that the $115 billion transaction would land Voda with a $20 billion tax bill – hence the idea of carrying out a merger instead. Apparently that’s now not going to fly, so it’s back to the drawing board.

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